Employment in the United States increased less than expected in July, with only 114,000 new jobs instead of the expected 185,000. The unemployment rate was 4.3%, higher than the expected 4.1%. Average hourly wages increased by 0.2% month-on-month USD 35.07, while annual wage growth was 3.6%, slightly lower than the expected 3.7%.
French industrial production increased by 0.8% in June month-on-month, following a 2.2% decline in May, slightly above economists’ expectations. The manufacturing sector also saw a production increase of 0.8%, after a 2.7% contraction in May. On a yearly basis, industrial production decreased by 1.2%, while the manufacturing sector saw a decline of 1.4%.
The euro increased with 0.2% to USD 1.0816 on Friday. The European currency was also up 0.2% against the British pound to GBP 0.8492. The British pound was flat at USD 1.2738.
The 6M Euribor decreased with 2 basis points to 3.56% compared to previous business day. The 10Y Swap decreased with 4 basis points to 2.50% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The Bank of England has decreased interest rates for the first time in four years, from 5.25% to 5.00%. This decision follows a decrease in the British inflation to the 2.00% target in May, though it is expected that the inflation increased to 2.7%, as the decrease in energy prices will fall out of the year-on-year comparison. The concerns about high service sector inflation (5.7%) and slow wage decline in the private sector still exist. Following the announcement, the British Pound decreased by 0.4% against the Euro, the two-year yield declined by 6 basis points to 3.76%, and the London stock market increased.
The Federal Reserve (Fed) has maintained interest rates at 5.25% to 5.05%. Fed Chairman Jerome Powell indicated that an interest rate decrease is approaching and that inflation risks are less significant. Labor market developments are also considered. The CME Fedwatch Tool estimates a nearly 90% chance of a decrease in September. Analyst Porcelli still expets three interest rate decreases in the remaining of 2024.
Oil traders bought a significant amount of call options due to increased tension I the Middle East, which could lead to higher prices. Over 300,000 Brent call option contracts were traded on Wednesday, the highest since April. Trading was dominated by large call spreads, such as USD 87 and USD 90 for October and USD 110 and USD 130 for November. A barrel of Brent oil was recently near USD 81. The market is worried about a potential escalation in the conflict between Israel and Iran, as well as Tehran-backed groups in Gaza, Lebanon, Yemen, and elsewhere, threatening oil supplies. The latest trigger was the killing of senior Hezbollah and Hamas leaders.
The 6M Euribor decreased with 1 basis point to 3.58% compared to previous business day. The 10Y Swap decreased with 5 basis points to 2.54% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Inflation in the Eurozone increased slightly in July, while core inflation remained stable. This was revealed Wednesday from preliminary figures by Eurostat. Consumer prices increased by 2.6% last month, whereas inflation in June was 2.5%. In May, inflation was also 2.6%. Core inflation, a key indicator for the ECB, was again 2.9% in July. This marks the third consecutive month at this level.
The outlook for the Dutch economy remained negative in July, similar to the outlook in June. This was reported by the Dutch Central Bureau of Statistics (CBS) on Wednesday. According to CBS’s economic indicator, 10 of the 13 indicators performed worse than the long-term trend last month. Consumers and producers were slightly more negative in July than in June. Both consumer and producer confidence were below the average of the past twenty years.
Crude oil inventories in the United States further decreased last week. This was revealed Wednesday from figures by the U.S. Energy Information Administration (EIA). In the week of July 26, crude oil inventories decreased by 3.4 million barrels to 433.0 million barrels. Analysts had expected a decline of 0.2 million barrels. Gasoline inventories also dropped significantly by 3.7 million barrels to 223.8 million barrels, where a decline of 1.3 million barrels was anticipated. Inventories of heating oil and diesel increased by 1.5 million barrels to 126.8 million barrels, against an expected decline of 0.4 million barrels. Refinery capacity utilization fell from 91.6% to 90.1%, with expectations set at 92.2%.
The 6M Euribor is unchanged at 3.59% compared to previous business day. The 10Y Swap decreased with 3 basis points to 2.59% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The German economy unexpectedly shrank by 0.1% in the second quarter, marking continued struggles with stagflation and diverging from the eurozone’s overall growth of 0.3%. Meanwhile, inflation in Germany rose to 2.6% in July, exceeding expectations and reinforcing concerns about persistent inflationary pressures.
The eurozone economy grew by 0.3% in the second quarter, slightly exceeding expectations, but pessimistic surveys and mixed economic indicators cloud the outlook for the rest of the year. While France and Spain outperformed, perceived ongoing competitiveness issues in the eurozone remain concerning.
U.S. consumer confidence rose unexpectedly in July to 100.3, despite ongoing concerns about inflation and high borrowing costs. Inflation expectations remained steady at 5.4% for the next 12 months, reflecting persistent worries about elevated prices.
The 6M Euribor is unchanged at 3.59% compared to previous business day. The 10Y Swap decreased with 3 basis points to 2.62% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Brent crude oil fell below $80 per barrel for the first time since June 10, influenced by algorithmic trading and weak demand from China, the world’s largest oil importer. China’s economic growth slowed to its lowest rate in five quarters, contributing to reduced global oil consumption, according to the International Energy Agency. Despite this decline, crude prices remain elevated year-to-date, bolstered by OPEC+ production cuts and anticipated US interest rate reductions by September.
In the second quarter, Taiwan’s exports increased by 9.9% year-on-year, a deceleration compared to the first quarter’s annual growth rate of 12.9%, driven by the surge in AI demand benefiting its technology-centric exporters like chipmakers. Taiwan hosts the world’s largest contract chip manufacturer, Taiwan Semiconductor Manufacturing Co. In July, the Asian Development Bank raised its 2024 growth projection for Taiwan to 3.5% from 3%, attributing this to robust chip exports and the AI boom.
Bitcoin declined from a six-week peak amid speculation the US may liquidate seized tokens, following Donald Trump’s promise to establish a government cryptocurrency reserve if re-elected. The US transferred $2 billion worth of Bitcoin to a new digital wallet, as reported by blockchain research firm Arkham. Analysts believe these tokens originated from the Silk Road marketplace. Bitcoin’s value peaked near $70,000 before falling by 2.2% to $66,482 in New York.
The 6M Euribor decreased with 3 basis points to 3.59% compared to previous business day. The 10Y Swap decreased with 4 basis points to 2.65% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Core inflation in the United States remained unchanged in June at 2.6 percent year-on-year, in line with economists’ expectations. The general price index fell to 2.5 percent, while incomes rose by 0.2 percent and spending by 0.3 percent. These figures matched predictions, except for the income increase, which was lower than expected.
The Russian central bank raised its official interest rate from 16.0 to 18.0 percent due to accelerated inflation that exceeded April’s expectations. The bank forecasts inflation of 6.5 to 7.0 percent for 2024 and anticipates a decline to 4.0 to 4.5 percent in 2025 due to tighter monetary policy. Inflation is expected to remain close to 4 percent in the years thereafter.
The euro stood around 1.086 dollars on Friday following the release of U.S. core inflation figures for June. The currency market is tense ahead of this week’s Fed rate decision, with a preference for the dollar prevailing despite doubts about the impact of a potential Trump presidency on the dollar. This week important growth and inflation data from the eurozone are published and rate decisions from both the Fed and the Bank of Japan are scheduled.
The 6M Euribor decreased with 3 basis points to 3.62% compared to previous business day. The 10Y Swap decreased with 2 basis points to 2.69% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The Ifo index for business climate in Germany fell from 88.6 to 87.0 in July. Analysts had expected an index of 88.8. The sub-index for current conditions dropped from 88.3 to 87.1, and the sub-index for expectations decreased from 88.8 to 86.9.
In July, the business confidence index in France dropped by 5 points to 94, according to the French statistics bureau Insee. This index remains below the long-term average of 100. Confidence in the manufacturing sector fell by 4 points to 95.
The central bank of China lowered the rate on the one-year lending facility from 2.5 to 2.3 percent and injected 200 billion yuan into the market. This was the first reduction since August last year. Earlier this week, the seven-day lending rate was also reduced from 1.80 to 1.70 percent, along with other interest rates. However, market commentators believe these measures may be insufficient to halt the economic slowdown.
The 6M Euribor increased with 1 basis point to 3.65% compared to previous business day. The 10Y Swap decreased with 1 basis point to 2.71% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The US stock markets closed significantly lower on Wednesday, influenced by disappointing results from major tech companies. Although the earnings season started strong, with many companies surpassing profit expectations, concerns arose due to a discrepancy between predicted profit growth and economic growth. Weak purchasing managers’ data and declining home sales further pressured sentiment.
Oil prices rose on Wednesday due to a larger-than-expected decline in US crude oil inventories and risks posed by wildfires in Alberta, Canada. Gasoline and diesel inventories also decreased significantly. This led to a 0.8% increase in the price of a barrel of West Texas Intermediate, reaching $77.59.
Economic growth of the eurozone significantly slowed in July, with declining purchasing managers’ indices for both the service and manufacturing sectors. The composite index barely stayed above 50, indicating very limited growth. Experts consider an interest rate cut in September likely, although rising input prices remain a concern.
The 6M Euribor is unchanged at 3.64% compared to previous business day. The 10Y Swap increased with 1 basis point to 2.72% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
U.S. existing home sales fell by 5.4% in June, reaching the lowest level since December, due to record-high house prices and high mortgage rates. However, increased supply and declining mortgage rates offer hope for a modest rebound in home sales later this year.
The Bank of England is urging banks to prepare for greater use of its repo facilities as it reduces its government bond holdings by £100 billion annually. The expanded repo operation is aimed at preventing a money market crunch and managing interest rates as the central bank’s reserves decline.
Brazil’s economy is projected to grow steadily at 2.0% in 2024 and 2025, driven by increased public spending, though fiscal deficits are expected to remain high. With the recent market turmoil and a slight rise in inflation expectations, analysts remain cautious about Brazil’s public finances and anticipate ongoing fiscal challenges.
The 6M Euribor increased with 1 basis point to 3.64% compared to previous business day. The 10Y Swap decreased with 4 basis points to 2.71% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The central bank of China unexpectedly lowered the seven-day repo rate from 1.80 to 1.70 percent to support economic growth. This move comes after disappointing economic figures and a slowdown in growth in the second quarter. Analysts believe the rate cut will not be enough to boost business confidence and expect more fiscal stimulus at the upcoming Politburo meeting.
In June, prices of existing homes in the Netherlands increased by 9.7 percent year-on-year, the largest rise in almost two years. Compared to May 2024, prices in June rose by 1.3 percent. After peaking in July 2022 and then declining, home prices have been rising again since June 2023. In June 2024, prices were on average 3.2 percent higher than at the previous peak in July 2022.
Nearly four out of ten central banks plan to hold more gold reserves in the coming years as a hedge against inflation, geopolitical unrest, and the rising U.S. debt, according to an Invesco survey. No central bank intends to reduce its gold holdings, and many prefer to keep their reserves physically and in their own country. This is due to concerns about the safety of foreign dollar reserves and the potential impact of sanctions, as seen after Russia’s invasion of Ukraine. Besides gold, central banks are looking to diversify their reserves and anticipate a reduced role for the dollar, with Asian countries increasingly holding regional currencies. Sovereign wealth funds are focusing more on stocks, hedge funds, and infrastructure, especially in emerging markets, and less on real estate and private equity, while still considering climate risks.
The 6M Euribor increased with 1 basis point to 3.63% compared to previous business day. The 10Y Swap increased with 2 basis points to 2.75% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
